[Code of Federal Regulations]
[Title 48, Volume 1]
[Revised as of October 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 48CFR32.103]

[Page 632]
 
            TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM
              (This book contains chapter 1, parts 1 to 51)

                CHAPTER 1--FEDERAL ACQUISITION REGULATION
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PART 32_CONTRACT FINANCING--Table of Contents
 
           Subpart 32.1_Non-Commercial Item Purchase Financing
 
Sec. 32.103  Progress payments under construction contracts.

    When satisfactory progress has not been achieved by a contractor 
during any period for which a progress payment is to be made, a 
percentage of the progress payment may be retained. Retainage should not 
be used as a substitute for good contract management, and the 
contracting officer should not withhold funds without cause. 
Determinations to retain and the specific amount to be withheld shall be 
made by the contracting officer on a case-by-case basis. Such decisions 
will be based on the contracting officer's assessment of past 
performance and the likelihood that such performance will continue. The 
amount of retainage withheld shall not exceed 10 percent of the approved 
estimated amount in accordance with the terms of the contract and may be 
adjusted as the contract approaches completion to recognize better than 
expected performance, the ability to rely on alternative safeguards, and 
other factors. Upon completion of all contract requirements, retained 
amounts shall be paid promptly.

[51 FR 19716, May 30, 1986, as amended at 60 FR 49711, Sept. 26, 1995]